Abstract
This study investigated the macroeconomic determinants of stock market performance in Nigeria between 1985 and 2018. The source of the data for the study were from World Bank Development Indicator, 2020 edition and Central Bank of Nigeria statistical bulletin. The study employed ARDL co-integration approach as estimation technique. Findings from the study showed that inflation rate, real interest rate, real effective exchange rate and world oil price were the major determinants of Nigeria stock market performance during the study period. Based on these findings, the study therefore concludes that both endogeneous and exogeneous macroeconomic variables determine Nigeria stock market performance. Hence, the activities in the global oil market should be monitored in formulating policies to enhance stock market performance in Nigeria.
Highlights
1.1 IntroductionThe issue of stock market performance and its impact on macroeconomic stability has received considerable attentions among academic researchers but policy makers are2020, Vol 10, No 4 not left out
Findings from the study showed that inflation rate, real interest rate, real effective exchange rate and world oil price were the major determinants of Nigeria stock market performance during the study period
It was revealed that all share index (ASI), RGDP, world GDP (WGDP) and world oil price (WOP) mirror normal skewness, while INF, money supply (MS), REEXR and RINT are positively skewness
Summary
This is because, stock market performance is one of the vital instruments of measuring economic well-being of a nation. In view of Obadan (1998), an active stock market contributes to changes in the general level of economic activities. It contributes to the economy directly or indirectly by mobilizing resources from surplus sector of the economy for the benefit of those in need of fund. It mobilizes savings, creation of liquidity, risk diversification, acquisition and dissemination of financial information, and enhanced incentive for corporate control. It mobilizes resources to firms, raising capital for investment, exerting corporate control and edging risk management within the economy. Demirguc-Kunt and Levine (1996) Efficient stock markets represent an important and necessary condition for transmission mechanism of monetary policy in every economy
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